Warren Buffett“A public opinion poll is no substitute for thought.”
Adlin Sinclair“Success is a welcomed gift for the uninhibited mind.”
Asian stocks between rise and fall as year 2009 approach its end
Sun, Dec 20 2009, 10:42 GMT
by ecPulse.com analysis team
As the dollar strengthened and this year is about to end, markets were affected by what can be called “the end of the year’s fever”. We can see world equity markets fluctuating and moving in undetermined sides, while the U.S dollar managed to win the battle against major currencies. Amid all these fluctuations, Asian stock markets witnessed consolidations and profit taking before the end of the year, amid fears of the future of world recovery.
Asian stocks witnessed a fluctuated week between rising and falling for different stock indices. Hong Kong stocks faced a declining wave, which is leaded by the bank’s shares after the People’s Bank of China said there are huge risks of increasing assets prices during the upcoming period, beside statement from the Chinese government saying that banks and financial corporations will have to stick to restrict financial procedures next year to control the liquidity markets, and control the increase in assets prices.
On the other hand, Japanese stocks took different direction than the Hong Kong’s stocks, as Japanese stocks rose during most of last week’s sessions supported by statements released in Nikkei newspaper that banks won’t have to follow restricted financial procedures during the period from ten to twenty years. Despite concerns that accompanied this statement, Japan’s stock market dealt with it in a recognized positive way.
The dollar’s gains against major currencies derived the yen itself to decline against the dollar after we used to see the raise of the dollar and yen at the same time during the last period against the other currencies that were assumed to be their safe side. This yen decline against the dollar derived the exports shares to incline, as the yen is falling that will help corporate sales to rise, supporting Asian indices to gain.
As for next week, it is not expected to come out with a lot of excitement as trading volumes in the financial markets are decreasing with the beginning of the holidays season, but the Japanese central bank will declare his monthly report that will not include any new news, according to expectations after the bank announced its decision last week, when it kept interest rate prices at it’s lowest levels of 0.10% for the whole year, while the bank is monitoring deflation risks that continued to threaten the economy.
New Zealand will announce this week the GDP reading for the third quarter that expanded 0.1% in the previous quarter, while the contraction the economy still contracting on the yearly record that came in at -2.1%. This sudden progress witnessed during the second quarter of this year was supported by improving consumer spending, in addition to rising exports after recovery witnessed in China and the improvement in the global demand in general compared to the first quarter of that year.
This week will end with a number of November’s fundamentals in Japan, where unemployment rate will be released and it is expected to incline to 5.2% compared with 5.1% in October, while household spending is forecasted grow in a slower pace at 0.3% compared with the prior reading of 1.6%.
Regarding the important fundamentals, it will concentrate on the yearly consumer prices index excluding fresh food, and it is anticipated to fall 1.7% following a decline by 2.2%, leading to rising deflation risks and more concerns about recovery in Japan.